(WXYZ) — The 7 Investigators first showed you how the secretary of state was investigating the mayor of Warren after he endorsed political candidates during his recent State of the City speech.
Now, state elections officials have notified the mayor that he is facing a potential violation of the campaign finance law.
In Michigan, it’s unlawful for a public body or a person acting on the public body’s behalf to use personnel, equipment and public resources to help a political candidate.
State elections officials have just informed the mayor of Warren with a letter that there is enough evidence to conclude that he did that recently, which they say means he potentially violated Michigan’s Campaign Finance Act.
During Warren Mayor Jim Fouts’ official State of the City address in June, Fouts spent more than 12 minutes of his speech endorsing candidates for mayor, city clerk and the city council.
“I want to highly recommend council members,” Fouts said during the speech and then proceeded to discuss his chosen slate of candidates.
And it’s those endorsements that have Fouts under the scrutiny of the Secretary of State’s Bureau of Elections.
City staff from the taxpayer-funded TV Warren worked to broadcast, record and stream the speech. Sources inside city hall told the 7 Investigators that TV Warren staff made the graphics for Fouts' political endorsements and used the city’s production truck and other equipment for the speech.
A complaint filed with the state alleged that TV Warren aired the speech repeatedly for weeks with the endorsements of Fouts’ chosen slate of candidates.
Now the secretary of state has issued a notice to Fouts, that says, “The intermingling of the ‘official’ speech and the ‘campaign activities’ throughout the speech and PowerPoint presentation is enough to conclude there was a violation of MCFA [the Michigan Campaign Finance Act].”
The state also told Fouts that “the evidence submitted supports the conclusion that a potential violation of the Act has occurred.”
“It’s illegally using city workers to do political work, which is taking the taxpayers' money and using those resources to put your thumb on the scale in an upcoming election,” Warren City Council Secretary Mindy Moore said.
Moore is one of the candidates who says she did not get a chance to respond to the repeat-airing of her opponent’s endorsement on the city-owned TV channel. Moore says she believes the mayor’s actions affected the primary election in August.
“He elevated unknown candidates by mentioning them, no. 1, during the speech, and then playing it over and over and over on TV Warren,” Moore told 7 Investigator Heather Catallo.
“I think that the scope of what's being suggested here is overly broad. And in this case, of course, this was an incident that occurred off site. It was sponsored by the Chamber of Commerce," said attorney Jack Dolan, who represents Fouts. “City money wasn't directly involved.”
Dolan alleges that resources for the speech were not prepared on city time, even though the secretary of state points out in their letter to Fouts that the mayor did not refute that city resources were actually used.
“If public resources are used, then then the Campaign Finance Act comes into play. If they're not used, then it doesn't come into play,” Dolan said. “That's what they seem to be suggesting. But they don't really in their — in what they've sent us so far — they haven't really identified what evidence they're relying on to say that they were used.”
Under the law, if they believe there’s a violation, the secretary of state’s attorneys first have to use informal methods like a conference or conciliation to correct the potential violation. They have 90 days to work on that with Fouts and his representatives.
In the past, the state made Fouts pay back more than $700 to the city as part of a settlement for a different potential violation that also involved one of his State of the City addresses.
Meanwhile, the city council intends to call on the attorney general to pursue criminal penalties.
If you have a story for Heather Catallo, please email her at hcatallo@wxyz.com.
